Global Stocks Are Outperforming Wall Street
In 2025, global equities are exceeding the performance of Wall Street like never before, marking the strongest outperformance since the Great Recession. This trend has been fueled by a combination of favorable trade deals, a weakening dollar, and broader global monetary policy shifts, leading to a significant turnaround in the market.
International Stocks Rise Significantly
As of mid-August, the iShares MSCI All Country World Index Ex U.S. ETF ACWX has soared by over 20.5% year-to-date, noticeably outpacing the SPDR S&P 500 ETF Trust SPY, which has lagged behind by nearly 10 percentage points. If this trend continues, it would indicate the largest annual outperformance of international stocks against U.S. equities since 2009.
Historical Context and Trends
Historically, U.S. stocks have outperformed global markets consistently since the financial crisis, except in a couple of years. However, data shows that this trend, commonly referred to as “U.S. exceptionalism,” is shifting as international markets rally.
Impressive Gains in Global Stocks
Among the companies achieving extraordinary gains, Palantir Technologies Inc. PLTR leads the S&P 500 with a remarkable 144% surge year-to-date. However, several international stocks have outshined this performance with returns exceeding 150% in 2025, driven by increased defense demand, investments in energy, and rising commodity values.
Here’s a list of seven global stocks that are outperforming Palantir as of mid-August:
- Doosan Enerbility Co., Ltd. DOSEF - South Korea: +273.22%
- Hyundai Rotem Company HYROF - South Korea: +258.75%
- Hanwha Ocean Co., Ltd. HOCPF - South Korea: +178.45%
- Hanwha Aerospace Co., Ltd. HWAIF - South Korea: +160.64%
- Lundin Gold Inc. LUGDF - Canada: +159.75%
- PT Barito Pacific Tbk BPTNF - Indonesia: +154.35%
- Rheinmetall AG RNMBF - Germany: +154.31%
The Impact of Tariffs and a Weak Dollar
Despite concerning rhetoric regarding trade tariffs by political leaders, international equity markets have unexpectedly thrived in 2025. The recent political landscape saw discussions around tariffs that were expected to deter growth, but instead, they opened avenues for enhanced trade agreements with key partners.
Moreover, the depreciation of the U.S. dollar has significantly favored global equities. The U.S. Dollar Index has dropped by 10% year-to-date, marking its poorest performance since 2003. This decline enhances the value of foreign assets for U.S. investors and indicates stronger performance in non-U.S. economies.
A Shift in Monetary Policy
Additionally, international markets benefit from robust monetary policies. While the Federal Reserve remains cautious about cutting rates, global central banks have implemented aggressive cuts to stimulate economic growth as inflation declines.
This notable shift in fiscal policy could signal the end of a 15-year dominance of U.S. equities. As analysts observe, this could potentially indicate a redirection of investments towards EU and Chinese markets, showcasing an ongoing transformation in the global investment landscape.
Concluding Thoughts on Market Dynamics
As the market continues to evolve, investors may find significant opportunities in international equities, particularly in sectors that are projected to benefit from global trends. Companies such as ACWX and PLTR symbolize the broader movement in equity performance, encouraging a fresh perspective on investment strategies.
Frequently Asked Questions
1. What factors are contributing to the growth of global stocks in 2025?
Global stocks are benefiting from favorable trade deals, a weakening dollar, and significant monetary stimulus in many foreign economies.
2. How are international stocks performing compared to U.S. stocks this year?
International stocks are significantly outperforming U.S. stocks, with the ACWX ETF surging over 20% year-to-date.
3. Which global stocks are leading the market in 2025?
Stocks like Doosan Enerbility, Hyundai Rotem, and Lundin Gold are among those exceeding 150% gains this year.
4. How does a weakening dollar affect foreign investments?
A weaker dollar increases the value of overseas assets for U.S. investors, making international investments more attractive.
5. What does this shift in market dynamics mean for investors?
This shift suggests a potential redirection of investments, highlighting opportunities in international equities that could outperform U.S. stocks going forward.
